AVIATION LAW

AIR CARRIER’S LIABILITY FOR INDIRECT DAMAGES ARISING FROM SHORT DELIVERY OF THE CARGO. TURKISH SUPREME COURT’S INTERPRETATION

Yasar Ozturk

Attorney At Law 

The Turkish Supreme Court’s 11th Civil Law Panel reviewed the judgment of the Istanbul 4th Commercial Court on a lawsuit and decided that the air carrier should not be entitled to avail himself of the provisions of Warsaw Convention which exclude or limit his liability for the loss of 355 collis of computers and parts as the carrier had gross fault equivalent intentional act on 26.01.1999. The Supreme Court’s file number is “ E:1998/5499, K:1999/136”. This decision has been published in June 1999 issue of The Supreme Court Decisions Journal. Turkish Supreme Court does not disclose the identity of the parties in its publications. Therefore this decision may be referred only with its date and file numbers as it is done in Turkey. The plaintiff, a commercial bank operating in Turkey, sued the air carrier for the short delivery of 355 of 462 collis containing computers and parts for the carriage by air from U.S.A. to Istanbul, Turkey. 462 containers of computers and parts have been delivered to the air carrier for the carriage from U.S.A. to Istanbul and 355 containers were not delivered to the consignee in Istanbul and therefore the plaintiff has suffered loss of his customers and profit as the bank could not start his computerized operations in the branch offices and expenditures done for the computer operation training of personel have been in vain, the purchase price of the computers had been paid in advance to the consignor and therefore the bank had suffered loss of income as the money laid idle for a long time and the bank had an additional loss because of the difference between foreign currency rates. The plaintiff has demanded Turkish Lira 5 billions indemnity togetherwith interest covering the losses. The defendant air carrier defended that the plaintiff had been indemnified with the value of the lost goods under the provisions of Warsaw Convention and the insurer had released the liability of the air carrier, therefore plaintiff would not be entitled to demand any other indemnity and there was not intentional act or gross fault of the carrier in the loss of the cargo and unlimited liability principle should not be applied. As conclusion, the defendant demanded the court to refuse the claim. The Istanbul 4th Commercial Court decided that; A- “The personel of the plaintiff bank could keep their knowledge for a long time after once having a good training and also the bank had been giving in-house training to his employees from time to time, therefore the plaintiff would not be entitled to demand any indemnity for the costs disbursed to train the employees who would operate the computers”. B- “Although plaintiff demanded indemnity for the difference of foreign currency rates, this would have no legal grounds as the plaintiff had not purchased new computers replacing the lost ones at the time lodging the claim” C- “The plaintiff demanded indemnity for the deprived interest income, because US$ 854.849.- value of the lost computers and parts laid idle for 245 days.Plaintiff would not be entitled to demand interest for the money used with his own will and also the plaintiff had received the indemnity for the lost computers’ value plus 10% from the insurer” D- “The plaintiff suffered loss of the fees and commission income expected from banking transactions to be carried out by using the computers and this loss has been calculated as TL 293.821.111 by the experts and being bound with the plaintiff’s demand relevant to this item, it has been decided that the defendant should pay this amount togetherwith rediscount interest to be calculated since 11.01.1992 to the plaintiff” This judgment of İstanbul 4th Commercial Court had been reversed by the 11th Civil Law Panel of The Turkish Supreme Court. The Istanbul Court has complied with the reversal of Supreme Court and decided that; “Although the liability of air carrier has been limited according to Article 22/2 of Warsaw Convention, the air carrier should have unlimited liability for the damage and loss caused with his intentional acts or acts and fault considered equivalent to intentional act according to the Article 25/1 of Warsaw Convention and Article 126 of Turkish Civil Aviation Code and in the subject matter, 355 of 462 collis have been lost and in this situation it should not be possible to mention about negligence of the carrier, but it should be necessary to mention about intentional act or at least gross fault equivalent to intentional act and therefore it was decided for partial acceptance of the claim and TL268.200.000.- to be paid togetherwith rediscount interest to the plaintiff by the defendant.” This judgment has been appealed by the attorneys of both parties and 11th Civil Law Panel of The Turkish Supreme Court decided as follows; “1- It has been necessary to refuse the defendant’s all appeal objections and plaintiff’s appeal objections except the one stated in the paragraph 2 below, as the local court decided according to the written evidence in the file and reversal decision, there has not been any unsuitness in court’s judgment, in respect of the facts of 355 collis which is more than 2/3 of 462 collis with 4300 kgs. weight containing computers and computer parts which require notable time and manpower for loading, unloading and moving due its volume and quantity, have been lost by the defendant and defendant could not have brought any explanation on how such a big amount and volume of cargo got lost and the court has assumed the carrier gross faulty equivalent to intentional act and on the otherside there has not been any unsuitness in not to avail the carrier of Warsaw Convention’s provisions which limit carrier’s liability under the limited liability principle appropriated with the Art.22 of Convention is about the direct damages to cargo or passenger and the indirect damages caused by short delivery and in subject matter the indirect damage (loss) has been claimed by the plaintiff. 2- However, plaintiff’s attorney has explained in his petition of 10.05.1993 that their loss items advising the loss of “banking services and cash, non-cash credit commission” as TL 268.200.000.- for one branch Office and the total loss arising out of this item as TL 29.684.000.000.- for 20 branch offices. In the experts report on which, the judgment based on, the loss concerning this item has been calculated as TL 293.821.111.-, therefore it has not been correct to decide as written in the judgment in lieu of sentencing for TL 293.821.111.- in its entirety” Consequently, it was decided that all appeal objections of defendant’s attorney and other appeal objections of plaintiff’s attorney to be refused based on the reasons written in above paragraph 1 and to reverse the judgment with the reasons explained in paragraph 2, in favor of the plaintiff on 26.01.1999”.